Problem 9-29 Portfolio Weights (LG9-7)You have $16,000 to invest. You want to purchase shares of Alaska Air at $43.16, Best Buy at $52.02, and Ford Motor at $8.86. Howmany shares of each company should you purchase so that your portfolio consists of 40 percent Alaska Air, 30 percent Best Buy, and30 percent Ford Motor? (Do not round intermediate calculations and round your final answers to the nearest whole number.)sharessharesAlaska AirBest BuyFord Motorshares

Shares are the units of the total stock of a company which shows the fractional ownership of the…

Answered: You have $16,000 to invest. You want to…

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter2: Financial Statements, Cash Flow,and Taxes

Section: Chapter Questions

Problem 21SP: Begin with the partial model in the file Ch02 P21 Build a Model.xlsx on the textbooks Web site. a....

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Q25 Problem 9-29 Portfolio Weights (LG9-7) You have $15,000 to invest. You want to purchase shares of Alaska Air at $42.88, Best Buy at $51.32, and Ford Motor at $8.51. How many shares of each company should you purchase so that your portfolio consists of 30 percent Alaska Air, 40 percent Best Buy, and 30 percent Ford Motor? (Do not round intermediate calculations and round your final answers to the nearest whole number.) Alaska Air shares Best Buy shares Ford Motor shares
You have $150,000 invested in three stocks as follows: Stock Investment Stock's Beta SYK $50,000 1.9 ISRG $50,000 1.2 YUM $50,000 (a) What is the beta value of your portfolio? (b) You desire a portfolio of 1.15 and will achieve this by selling $25,000 of ISRG and an additional amount SYK, with the proceeds of both sales to purchase YUM. What dollar amount of SYK should you sell? What dollar amount of YUM will you purchase? 0.9
Paul McLaren holds the following portfolio: Stock Investment Beta A B C D $150,000 1.40 O-0.286 Total $375.000 -0.260 -0.234 50,000 0.80 Paul plans to sell Stock A and replace it with Stock E, which has a beta of 0.75. By how much will the portfolio beta change? O-0.190 100,000 1.00 -0.211 75.000 1.20
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9. Portfolio beta and weights Rafael is an analyst at a wealth management firm. One of his clients holds a $10,000 portfolio that consists of four stocks. The investment allocation in the portfolio along with the contribution of risk from each stock is given in the following table: Stock Atteric Inc. (AI) Arthur Trust Inc. (AT) Li Corp. (LC) Transfer Fuels Co. (TF) Investment Allocation O 0.9009 percentage points O 1.4322 percentage points 35% 20% 15% 30% 1.1550 percentage points O 1.3283 percentage points Beta 0.900 1.400 1.100 0.300 O Undervalued Standard Deviation Rafael calculated the portfolio's beta as 0.850 and the portfolio's required return as 8.6750%. Rafael thinks it will be a good idea to reallocate the funds in his client's portfolio. He recommends replacing Atteric Inc.'s shares with the same amount in additional shares of Transfer Fuels Co. The risk-free rate is 4%, and the market risk premium is 5.50%. 23.00% 27.00% According to Rafael's recommendation, assuming that…
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Suppose you invest in 150 shares of Harley-Davidson (HOG) at $40 per share and 250 shares of Yahoo (YHOO) at $25 per share. If the price of Harley-Davidson increases to $50 and the price of Yahoo decreases to $20 per share, what is the return on your portfolio? OA. 2.04% OB. - 10.50% O C. -5.20% OD. 12.25% C
You have the following share price of XYZ. DATE Price 2-Mar-2021 $100 3-Mar-2021 $60 4-Mar-2021 $40 5-Mar-2021 $100 Investor A bought 100 shares of XYZ on 2-Mar-2021 and sold all the shares on 5-Mar-2021. Which answer is the closest value to the geometric average rate of return for the investor? A. 15% B. 20% C. 25% D. 0%
Investor Z has $100,000 invested in a 2-stock portfolio. $33,000 is invested in Stock X, and the remainder is invested in Stock Y. Stock X's Beta is 1.50 and Y's Beta is 1.10. What is the portfolio's Beta? Group of answer choices 1.42 1.10 1.50 1.37 1.23
Jill Valentine has $100,000 invested in a 2-stock portfolio. $30,000 is invested in Stock X, and the remainder is invested in Stock Y. Stock X's Beta is 1.40 and Y's Beta is 0.90. What is the portfolio's Beta? (Ch. 8) Group of answer choices 1.25 0.90 1.40 1.16 1.05 PreviousNext
(a)As an investor, you are holding the following investments: Stock Amount invested beta A $40 million 1.4 B $30 million 1.0 C $60 million 0.8 You are planning to sell the holdings of Stock B. The money from the sale will be used topurchase another $20 million of Stock A and another $10 million of Stock C. The risk-free rateis 7 percent and the market risk premium is 6.5 percent. How many percentage points higherwill the required return on the portfolio be after you complete this transaction?
2 Tom holds the following portfolio Stock Investment Stock Investment Beta A $150,000 14 B $50,000 0.8 S100,000 D S75,000 1.2 Total $375,000 Tom plans to sell Stock A and replace it with Stock E, which has a beta of 0.75. By how much will the portfolio beta change?

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